Susanna Kaysen was born and raised in Cambridge, Massachusetts. She is the daughter of economist Carl Kaysen, a professor at MIT and former advisor to President John F. Kennedy, and his wife Annette Neutra Kaysen. Kaysen has one sister and is divorced. She lived for a time in the Faroe Islands, upon which experience her novel Far Afield is based.

Kaysen attended high school at the Commonwealth School in Boston, and the Cambridge School before being sent to McLean Hospital in 1967 to undergo psychiatric treatment for depression. It was there she was diagnosed with borderline personality disorder. She was released after eighteen months. She later drew on this experience for her 1993 memoir Girl, Interrupted, which was adapted into a film in 1999, in which she was portrayed by Winona Ryder.